Social media scam artists prey on India’s amateur investors

Many amateur retail investors, especially the young, sought to make a quick buck by consulting informal groups on platforms like WhatsApp and Telegram. Recourse for investments gone awry is limited: In India, fines for everything from insider trading to wire fraud are a fraction of those imposed in some western nations. — Bloomberg

India’s mom-and-pop investors are facing testing times. During a pandemic-era surge in the stock market, millions poured their savings into equities, drawing on advice from unauthorised financial advisers and social media “gurus” to help identify the next big ticket.

But a recent slide in stock values has laid bare the dangers of India’s lax capital market regulations. Many amateur retail investors, especially the young, sought to make a quick buck by consulting informal groups on platforms like WhatsApp and Telegram. Recourse for investments gone awry is limited: In India, fines for everything from insider trading to wire fraud are a fraction of those imposed in some western nations.